GSA Announces Major Nuclear Energy Contract
The General Services Administration (GSA), which is responsible for managing government buildings, has recently announced a significant nuclear energy contract. This development comes on the heels of several major tech companies making substantial nuclear energy deals in the past year.
$840 Million Contract for 10 Million Megawatt-Hours of Electricity
The 10-year contract, worth $840 million, is for 10 million megawatt-hours of electricity. According to the GSA, this amount is equivalent to what’s needed for more than 1 million homes annually. The agency has awarded the contract to Constellation, which operates the nation’s largest nuclear fleet and has recently announced an agreement with Microsoft to restart a nuclear reactor at Three Mile Island.
Significance of Nuclear Energy in the Contract
Nuclear energy accounts for approximately 4 million megawatt-hours of the total amount agreed upon under the contract. This information was provided by Constellation spokesperson Paul Adams. Silicon Valley is increasingly turning to nuclear energy to meet electricity demands from AI data centers.
The federal government is the nation’s single largest energy consumer, making this contract a significant boost for the nuclear industry. As Joe Dominguez, Constellation president and CEO, stated in a press release: ‘This agreement is another powerful example of how things have changed… Nuclear energy was excluded from many corporate and government sustainable energy procurements. Not anymore.’
Constellation’s Commitment to Nuclear Energy
Constellation generates 10 percent of the nation’s carbon pollution-free energy. The majority of its output comes from nuclear energy, but it also produces hydro, wind, and solar power. In addition, the company generates electricity from gas-fired power plants. However, Constellation has set a goal of reaching 100 percent carbon-free electricity by 2040, compared to close to 90 percent today.
Contract Details
Constellation and the GSA declined to provide information on how much of the electricity included in the contract will come from each source aside from nuclear power plants. The contract marks the largest energy procurement agreement the GSA has signed in its history. As stated by GSA administrator Robin Carnahan: ‘This historic procurement locks in a cost-competitive, reliable supply of nuclear energy.’
The contract allows Constellation to extend licenses for existing nuclear power plants as well as invest in new equipment and technology that should result in 135 megawatts of additional capacity. The GSA has agreed to purchase 2.4 million megawatt-hours of electricity from this added capacity over a period of 10 years.
Extension Beyond Government Buildings
The deal extends beyond government buildings, covering 13 other agencies, including the departments of Veterans Affairs and Transportation as well as the Federal Bureau of Prisons, the National Park Service, the Social Security Administration, and the US Mint.
Locking in Affordable Prices
The GSA is framing the contract as a way to lock in more affordable prices due to increasing electricity demand from data centers and AI facilities. The agreement provides federal agencies with budgetary stability and protection from future price increases by keeping their electricity costs fixed for 10 years.
Biden Administration’s Support for Nuclear Energy
The Biden administration has made nuclear energy a key part of its plan to transition the US away from fossil fuels to energy sources that don’t cause climate change. In October, the Department of Energy announced a $1.52 billion loan to help restart a retired nuclear generating station in Covert Township, Michigan.
Nuclear Energy Deals in Silicon Valley
Several major tech companies have made significant nuclear energy deals over the past year. In September of last year, Microsoft and Constellation announced a plan to restart a shuttered reactor at Three Mile Island in Pennsylvania, the site of the worst nuclear energy accident in US history.
The Future of Nuclear Energy
While President-elect Donald Trump’s plans to undo progress made toward clean energy are uncertain, his campaign agenda included efforts to ‘support nuclear energy production.’ The announcement by the GSA marks a significant step forward for the nuclear industry and underscores the importance of investing in reliable nuclear energy.